This is a partial transcript from Your World with Neil Cavuto, October 30, 2001.
NEIL CAVUTO, HOST: Well, the travel and tourism industry is hurting. Airlines are flying with airplanes just a little over half full, hotel bookings are down, and cruise lines are also feeling the pain. Royal Caribbean had a 50 percent drop in bookings following the September 11th bombings, but since then it's somewhat recovered through a lot of deep discounts.
So where do they stand now? Let's ask the chairman and CEO, Richard Fain, who joins me now from Miami. Richard, good to have you back.
RICHARD FAIN, CHAIRMAN & CEO, CARIBBEAN CRUISES: Neil, nice to be back, and you know, as you say, we really suffered immediately after the tragedies of September 11th, but ever since then we've seen a gradual buildup. And we've obviously encouraged that with deep discounting. But...
CAVUTO: How deep, how deep is the discounting?
FAIN: Well, we have some across the board as low as 499 for a seven- night cruise. We really want people to see the tremendous benefit and the tremendous deal they're getting on cruising. But amazingly, yesterday, we had the fourth-best booking day in our history. We really are seeing the volumes coming back slowly and progressively.
CAVUTO: But they're coming back at a cost to you, right? I mean, there's got to be a lot less cash for you in this, right?
FAIN: Absolutely. We obviously don't like having to do deep discounts, but we really have to get people back, comfortable with tourism, comfortable with cruising. And what we are seeing is that industry is price-elastic so that we can get them back the price. So now, we can begin to raise our price, and that's what our whole revenue management system is based on.
CAVUTO: All right, give me some ideas of fares, though, right now. What kind of packages were you looking at in maybe select cities or destinations?
FAIN: Well, I mentioned one of the ones that bothers me the most, but it attracts a lot of people is you can take a seven-night cruise on one of our new megaships, some of the most popular ships and most profitable ships in the world, $499 per person for a week's vacation.
CAVUTO: Wait a minute. $199 for a seven-day cruise.
FAIN: No. Fortunately it's not that bad, Neil. It's $499.
CAVUTO: All right. Gee, I thought you said 199. Sign me up.
So all right, so $499. Where are you? Like in a bunker or what are you doing?
FAIN: No, $499 is the marginal price, and what we would expect to do from this point is now that we see that the demand is there -- we just have to attract it with price -- now what we have to do is gradually raise our prices, fill the ships and get back to where we were. We have a big hole to fill, but it's now clear to us that we can begin to fill that hole.
CAVUTO: You've got to get them drinking fast, Richard. I mean, you've got to pad that liquor bill or something. That's not good.
FAIN: Well, it's not the liquor bill. It's what we have to do is make sure that people are enjoying themselves and they are having a wonderful cruise.
CAVUTO: Any security concerns any of them have, like going to destination, particularly maybe South America, where they might say, "Ah, you know..."?
FAIN: Well, I think one of the things about cruising is it's always been considered one of the safest forms of vacation, but we've ramped up our security across the board. We're inspecting every bag, every provisioning. We check the manifest of every passenger and every crew member.
We're starting to use so many dogs, bomb-sniffing dogs and other dogs, we're even beginning to think that we should start our own breeding farm. But...
CAVUTO: All right.
FAIN: But no, what we've done is we've brought ships back from Europe so that most of our ships sail out of U.S. ports, and that seems to be making people feel more comfortable, yes.
CAVUTO: All right. Let us know if you do that $199 thing, though.
All right, Richard Fain, good having you.
FAIN: Not likely, Neil. Thank you.
CAVUTO: All right, the head of Royal Caribbean, Richard Fain.
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